Yankee Brass Notifies Agents- No Multiyear Deals

[Yankee Clipper]

How does this hold us back? The money just comes out of the owner's pockets.

Well even if you think they should add to the payroll there aren't any legitimate free agent options out there to give a multi-year contract to.

[carljam1]

Well even if you think they should add to the payroll there aren't any legitimate free agent options out there to give a multi-year contract to.

That much I can agree with, but I still feel this belief that we HAVE to get under the luxury tax range is silly.

[PACISLE]

Easy for all of us to say "just come out of the owners pockets." Yep, we dont have to pay that tax. As long as the fans are willing to pay those higher prices for seats, parking, food, etc. oh wait......

[Dugmet]

I think it's the opposite. They only have to be under once every five years to avoid that giant tax hike.

Tell ya what. Here is a decent summary on Fangraphs. Read it over and see what you think.

The Yankees have paid the luxury tax every season since the tax’s inception. In 2011, the Yankees’ tax rate was 40% — the highest possible rate under the previous CBA. That means the team’s tax rate in 2012 is 42.5% and will be 50% in 2013. But if the Yankees keep payroll below $189 million in 2014, it not only avoids the tax that season, but it also lower the team’s luxury-tax rate for 2015 to only 17.5%. That’s right, avoiding the luxury tax for just one year re-sets a team’s tax rate to the lowest under the CBA. Even for the Yankees, the difference between a 50% tax rate and a 17.5% tax rate is significant.

So, for example, if a team’s payroll for 2012 was $185 million, that team would be taxed on $7 million ($185 million – $178 million). But what’s the tax rate? That depends. The rate is tied to a team’s luxury tax history. If the team wasn’t assessed a tax in the prior season, then the tax rate is 20%. If the team paid the luxury tax in 2011 at a 22.5% rate, then the tax rate for 2012 is 30%. A 30% luxury tax rate in 2011 would yield a 40% rate for the same team in 2012. And a 40% luxury tax rate in 2011 would mean a 42.5% rate in 2012. For the seasons 2013 through 2016, the initial rate goes down (from 20% to 17.5%), the 30% and 40% tax rates stay the same and the 42.5% rate shoots up to 50%.

Based on everything I read. It's a simple rate progression. You can reset it, but it will climb annually if you exceed the threshold. I won't argue this is conclusive. I have not read anything that clarifies it 100%. It makes a lot of sense to hit the reset button, but the monkey climbs back on and takes a 5-year ride up the hill with you if you stay over.

[PACISLE]

50% down to 17%.... Thats huge.

[LeoYankee]

Tell ya what. Here is a decent summary on Fangraphs. Read it over and see what you think.



Based on everything I read. It's a simple rate progression. You can reset it, but it will climb annually if you exceed the threshold. I won't argue this is conclusive. I have not read anything that clarifies it 100%. It makes a lot of sense to hit the reset button, but the monkey climbs back on and takes a 5-year ride up the hill with you if you stay over.

Good find. That's basically what I meant. If they reset every five years, they save that 33%.

Heck, if I was Hal I'd mandate that we never go over $189m. I mean, it is just throwing away loot.

[Muddy D0g]

It's funny, cause if Pineda didn't get hurt, this situation could be completely different. I think cash thought that was his Multiyear top pitcher that would be cheap for a few years.

Now we have to play the Kuroda Derby, which we will lose.

I'm good with

CC Andy Hughes nova phelps plus some vet backups in the mix for a year or two.

exactly! and the way I see it, pineda and seattle hid his shoulder problems. which is why cashman should own up to this crap, because he didn't do his freakin job. from what i've heard, pineda wasns't even asked if he ever had an mri on his shoulder. I blame cashman. own it biach

[theslick1]

Good find. That's basically what I meant. If they reset every five years, they save that 33%.

Heck, if I was Hal I'd mandate that we never go over $189m. I mean, it is just throwing away loot.

Me too.

How many teams that have won the World Series have spent more than 189M?

Only the 2009 Yankees.

You don't have to spend 189M+ to win a World Series.

[ShadyOne]

Honestly, I'm all for this...

Not only for the idea of resetting the tax, but to stop the ridiculous spending on nothing. Keep giving youth a chance, make some seemingly small but smart moves here and there, and wait. Keep the resources (both in trade pieces and money) ready for worthwhile opportunities.

Made easier by the fact there isn't anyone worth thinking about spending a ton of cash on right now....

[Pinstripe power]

If the way I understand the loophole in the luxury tax is correct, it's the smart play by the yanks.

I believe that 2014 represents the 5th year in a row ( or something like that) that the Yanks would be over the threshold. If they do stay over, the tax penalty skyrockets to 50% or some crap......if they go under for only one year, it drops to like 14% for the next five.

My numbers are probably off, but that's the general gig.

Hence, a HUGE deal to be under $189m in 2014.

so we are going to do this eveyr five years basically?

[thawv]

According to Tim Briwn of Yahoo, inquiring agents have been notified that the Yankees will not offer any contracts beyond this season in an effort to curtail significant spending for 2014. The Yankees only need to be under the $189m luxury tax threshold for that one season to avoid the significant jump in luxury penalties.


If this is legit, I guess we need to get ready for a dull offseason of one year scrap heapers.

If the Yanks can't win with a 189 mil dollar payroll, you guys have more problems than you think.

[ShadyOne]

If the Yanks can't win with a 189 mil dollar payroll, you guys have more problems than you think.

Sure they will win..But around here, as you might have heard, we are used to championships and interesting off-seasons full of big signings..

And why does an offseason full of dull scrap heap, bargain-type FA signings mean we can't or won't win? Did it last year, and made it to the 2nd round, right?

[johnnyi]

If they are under the cap in Year 1, the Yankees pay no luxury tax, so they save 50% in Yr 1, then in YR 2 save the difference between 50% and 17%, which is 33% savings, then in year 3 save the difference between 50% and 30% which is 20% savings, then in year 4, the difference between 50% and 40%, which is a 10% savings. So over a 4 year period 50% +33% +20% +10% = 113% over 4 years Then they can reset back to zero again and start those same savings all over again. Of course, they could reset in the middle of the time frame. Also, in addition to the salary cap penalties, I believe that there might also be non-financial penalties for being over 50% 2 or more years in a row. one good point is that the salary cap will also climb each year from the $189 K.

[johnnyi]

If they are under the cap in Year 1, the Yankees pay no luxury tax, so they save 50% in Yr 1, then in YR 2 save the difference between 50% and 17%, which is 33% savings, then in year 3 save the difference between 50% and 30% which is 20% savings, then in year 4, the difference between 50% and 40%, which is a 10% savings. So over a 4 year period 50% +33% +20% +10% = 113% over 4 years Then they can reset back to zero again and start those same savings all over again. Of course, they could reset in the middle of the time frame. Also, in addition to the salary cap penalties, I believe that there might also be non-financial penalties for being over 50% 2 or more years in a row. one good point is that the salary cap will also climb each year from the $189 K.

I made a mistake in the above summary. According to the agreement, the $189 K salary cap does not increase for the next 3 years.

[Harry Dunn]

If the Yanks can't win with a 189 mil dollar payroll, you guys have more problems than you think.

sure they can. It's just difficult when 120 of it is already committed to trash.